Arabic music channels look at new revenue generation models

Free-to-air music channels in the Arab world are looking at new telecom-based revenue generation models as normal advertising revenue methods will not suffice.

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By  Vijaya Cherian Published  March 2, 2004

A sizable number of Arabic music channels are expected to come up in the region shortly although their numbers are likely to fall again in the next couple of years owing to ‘shakeout’ and ‘consolidation’, according to a report from the Arab Advisors Group (AAG). Those that will survive include the big channels with more money and a larger viewership, according to the report. “Operating a satellite TV station is a costly affair," commented AAG’s media research analyst, Judeh Siwady. "The cost of renting transmission channels on a satellite system can exceed the US $300,000 mark every year. This is not counting content, human resources, production and studio costs. With close to 100 satellite TV stations (of all shapes and forms) targeting the Arab World the competition for eyeballs and ad revenues is surely an up hill battle,” added Judeh. The report, which analyses the region’s eleven free-to-air music channels, also observes that these channels will try new telecom-based revenue generation models as normal advertising revenue methods will not suffice. “Analyzing their content, it is evident that television advertising is not the main planned revenue source for FTA music channels,” commented Siwady. Music channels are trying to leverage the growing base of mobile phone users throughout the Arab region. SMS messaging is a key planned aspect of generating revenue as the lines between the media and telecommunication services blur,” explained Judeh. The AAG report shows that currently, Lebanon hosts the largest number of free-to-air music channels in the region with five channels broadcasting from the country including the Saudi-owned Rotana TV. Egypt follows with four, followed by the UAE with two channels. The analyst house believes that both the TV channels and telecom operators have a stake in increased adoption and usage of telecom-based services in the media industry. “We therefore expect increased promotion for these services both by the broadcast industry and by the telecom operators,” commented Judeh.

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